Renewable energy will play an increasingly crucial role in the future of Welsh farming, providing an important secondary income and diversification, according to Euryn Jones, HSBC’s Regional Agriculture Manager for Wales.

Speaking at the Royal Welsh Show, Euryn said that HSBC has seen a strong increase in interest in renewable energy from the Welsh farming community in recent months. So far in 2012, HSBC’s Agriculture Team in Wales has already provided more than £5 million for its farming customers to fund wind turbines, hydro schemes and solar energy projects, with a further £1.8 million approved.

Nearly two-thirds (65%) of the investment to date has been in wind energy; one-fifth was allocated to solar panels (20%) and 15% of funding has been provided for other forms of renewable energy projects, primarily hydro schemes.

A further £1.8 million funding has been approved for loans to be drawn down as projects are completed. The majority of this future funding has been allocated for wind energy, but finance for more hydro schemes has also been agreed. However, there is significantly less interest in new solar energy investment in Wales, which reflects the reduced feed-in tariff being offered by the Government.

HSBC’s Agriculture team worked with Mid Wales farmer Tegwyn Jones to install a new hydroelectric scheme on his farm last year. The £500,000 scheme produces 100KW per annum and complements Mr Jones first hydroelectric scheme, which was installed 10 years ago and produces 93KW per annum. Mr Jones introduced the schemes to ensure the farm remained sustainable so that his two sons could also farm the land. It is estimated that the new scheme will generate income of at least £75,000 a year, but is likely to generate over £100,000.

Tegwyn Jones said: “My family has a history in hydroelectricity as my grandfather was an engineer and developed schemes in Wales. We could see clear potential in this as the first scheme had been a success and we were delighted with the support offered by HSBC’s Agricultural team. This will generate a consistent and sustainable stream of income, which makes the farm more secure and enables us to expand.”

Euryn Jones said that a significant number of Welsh farmers were thinking about installing renewable energy technology on their farms. He said: “In addition to the £6.8 million that we have agreed to fund so far, we are discussing several more wind and hydro projects with farmers, both customers and prospective customers. Renewable energy provides an opportunity for farms that are appropriately sited with strong and reliable sources of wind or water to build a valuable additional flow of income for their businesses.

“As with all major investments, it is important that farmers think carefully about all aspects of a project before committing themselves. We would always encourage farmers to take reliable professional advice, particularly where they are inexperienced in the sector.

“At HSBC we believe that renewable energy projects will have an increasingly important part to play in the future success of Welsh farming. We have a proven track record in financing such projects and look forward to supporting many more farming customers in future.”